Luckin Coffee to Pay $180 Million to Settle Accounting Fraud Charges
Chinese beverage chain Luckin Coffee filed a document on Friday with the United States Securities and Exchange Commission (SEC), showing that the company had met conditions for reaching a settlement agreement whereby it will pay a fine of $180 million.
On December 16, 2020, Luckin Coffee announced that it would pay the sum to settle accounting fraud charges leveled against it by the the SEC. On the same day, the SEC submitted the proposed settlement plan to court, saying that the agreement between the two parties must be legally approved.
In September 2021, Luckin Coffee announced that it had signed a $187.5 million settlement letter of intent with the plaintiff’s representative in a US class action lawsuit.
On Thursday, the SEC submitted a notice to the court, confirming that Luckin Coffee paid cash to the securities holders of the company through debt restructuring, which met the penalty clause of the final judgment of the court.
However, after this financial fraud crisis, it is still unclear whether Luckin Coffee will re-list in the future. The Financial Times revealed in January this year that Luckin Coffee is considering a plan to re-list in the US as soon as the end of this year. However, the report was denied by Luckin.
On January 27, a consortium led by Centurium Capital, a Beijing-based investment company, acquired shares owned by former Luckin Chairman Charles Lu and former CEO Jenny Qian. The buyers also include investment companies IDG Capital and Ares SSG Capital Management.Centurium Capital now owns more than 50% of the domestic beverage chain.
SEE ALSO: Centurium Capital Gains Control of Chinese Beverage Firm Luckin Coffee